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Global Retail Chains and the Supplying Industries: Evidence from Romania

Author

Listed:
  • Beata S. Javorcik
  • Yue Li

Abstract

Despite the controversy often surrounding retail sector liberalization, there little empirical evidence on the implications of such a reform. Using data from Romania, this study sheds light on what happens to the supplying industries after a country opens its retail sector to foreign direct investment. The study relies on a unique dataset combining outlet-specific information on global retail chains with a panel of Romanian manufacturing firms. The difference-in-difference analysis finds that the expansion of global retail chains leads to a significant increase in the total factor productivity (TFP) in the supplying manufacturing industries: their entry into a region raises the TFP by 3.8–4.7%. These results suggest that liberalizing retail sector can boost performance of domestic manufacturing. (JEL codes: F23, F14, L81, D24)

Suggested Citation

  • Beata S. Javorcik & Yue Li, 2014. "Global Retail Chains and the Supplying Industries: Evidence from Romania," CESifo Economic Studies, CESifo Group, vol. 60(1), pages 107-134.
    • Handle: RePEc:oup:cesifo:v:60:y:2014:i:1:p:107-134.
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifu007
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    Citations

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    Cited by:

    1. Angela Cheptea, 2014. "Do multinational retailers affect the export competitveness of host countries?," IAW Discussion Papers 106, Institut für Angewandte Wirtschaftsforschung (IAW).
    2. Apostolov Mico & Scagnelli Simone Domenico, 2019. "Foreign-Versus Domestic-Owned firms in the Predicament ‘Cui bono?’," Business Systems Research, Sciendo, vol. 10(2), pages 18-36, September.
    3. Cheptea, Angela, 2016. "Multinational retailers and host countries’ export competitiveness," 149th Seminar, October 27-28, 2016, Rennes, France 244952, European Association of Agricultural Economists.

    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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